NCLA Site Search

Amicus Briefs

American Securities Association v. SEC

NCLA filed a brief in urging the U.S. Court of Appeals for the Eleventh Circuit to strike down an SEC order requiring financial industry broker-dealers to fund its government-mandated “Consolidated Audit Trail” (CAT).

SEC’s CAT is an unprecedented mass confiscation of personal financial data. Without any statutory authority to set up such a program, SEC is forcing brokers, exchanges, clearing agencies and alternative trading systems to capture and send detailed information on every investor’s U.S. market trades to a centralized database, which SEC, self-regulatory organizations and outside contractors could access forever. The database puts every American’s financial data and security at grave and needless risk from cybersecurity breaches.

SEC’s CAT system seizes Americans investors’ financial data without due process of law, violating their Fourth [and Fifth] Amendment rights by mandating these searches and seizures of financial records without following any constitutionally sufficient procedures, or even having a suspicion that any particular investor broke the law. SEC’s actions also violate the investors’ First Amendment freedoms of association and expression, prying into each investment decision they make as well as turning over their proprietary and private investment preferences and strategy to the government.

Congress never passed a statute giving SEC authority to set up a data collection and surveillance system. By creating it on its own authority, SEC wielded legislative power, violating the clause in Article 1 of the Constitution that vests Congress with all lawmaking authority. SEC also violated the Administrative Procedure Act.

SEC funds its CAT scheme by self-appropriating billions from self-regulatory organizations like the FINRA, ignoring the Constitution and statutes that reserve taxation and appropriations powers for Congress alone. Those costs, by SEC design, will be fully passed on to American investors as an artfully named multi-billion dollar “fee,” SEC’s Orwellian doublespeak for an unlegislated tax.

Mark Chenoweth
President and Chief Legal Officer
Margaret A. Little
Senior Litigation Counsel
Andrew Morris
Senior Litigation Counsel
NCLA FILINGS

Brief of the New Civil Liberties Alliance as Amicus Curiae in Support of Petitioners

February 15, 2024 | Read More

PRESS RELEASES

NCLA Amicus Brief Exposes Fatal Constitutional Flaws in SEC’s Illegal Mass Data Collection Regime

February 15, 2024 | Read More

RELATED CASES

SHARE THIS CASE

Enter your email address above to be notified whenever we post a new document to this case.